Libya’s eastern-based parliament has approved a 69 billion Libyan dinar ($12.7 billion) budget for its Development and Reconstruction Fund, overseen by Belgassim Haftar, son of eastern military commander Khalifa Haftar.
The fund is intended to finance infrastructure projects over the next three years, but is sparking major political backlash in the midst of a brewing crisis that has seen armed clashes in Tripoli in May and June, risking all-out civil war.
A group of 113 members of the House of Representatives (HoR) have urged Speaker Aqila Saleh to suspend the budget’s approval, arguing that the session lacked quorum and violated procedural norms. The lawmakers also asked the Central Bank of Libya to refrain from executing any financial transfers linked to the fund, warning of institutional overreach and legal irregularities, the Libya Observer reported.
At the same time, Prime Minister Abdul Hamid Dbeibah denounced the fund as a potential instrument for financial mismanagement. He warned that the budget risks triggering a new economic crisis if unchecked, accusing the HoR and its eastern allies of destabilizing national finances under the guise of reconstruction.
The controversy comes amid Libya’s deepening political divide. Khalifa Haftar’s eastern forces retain control over major oil export hubs in the northeast, while Dbeibah’s internationally recognized government, backed by Turkey, governs the west. Oil revenue distribution remains a flashpoint between these competing centers of power, with ongoing disputes over control of the National Oil Corporation (NOC) and access to central bank funds.
As geopolitical pressure mounts toward a civil war, global energy markets are watching closely. Any disruption in Libyan oil flows could send ripple effects through Mediterranean crude benchmarks and threaten Europe’s supply security.
By Charles Kennedy for Oilprice.com
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